John Horvath on Thu, 15 Jan 1998 06:44:59 +0100 (MET)

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<nettime> At the Crossroads

Hello everyone,

This started out as a simple question, but somehow mushroomed in size.
Therefore, I added a title. You can consider it a commentary of sorts.


At the Crossroads
by John Horvath

I'm looking for suggestions toward a possible resolution of a basic, yet
under-targeted, dilemma. The new year has introduced the beginning of
telecom liberalisation in many areas, most notably the EU and Canada.
Likewise, rates for basic telecom services have gone up significantly in
many countries, not only Central and Eastern Europe (e.g., Hungary 25%,
Russia 100%), but in North America as well (in Canada on average 10%).

Subsequently, many users are protesting against such increases, citing
that they hinder the further development and evolution of an "Internet
culture". While many individual users are truly affected, this crusade
against rising telecom rates is being hijacked businesses who see their
corporate welfare benefits drastically reduced.

In many ways, the "Internet culture" movement of the 90s parallel the
counterculture movement of the 60s. The target audience of both are
young, the outlook of both are generally optimistic and overtly
idealistic, and they both harbour seemingly anti-establishment
attitudes. While the call-word of the 60s was "counterculture", it would
not be an exaggeration to say that the call-word at present is

Behind the scenes, however, both movements are manipulative. Not only is
rock and roll here to pay, but so too is the Internet. For all its
rhetoric, the 60s provided one important element: that of a mass market.
The exploitative nature of mass youth movements (which, incidentally can
be traced to communism and fascism; indeed, Jagger's favourite film is
Triumph of the Will and Bowie noted that Hitler was in fact the world's
first pop star) became more apparent through the 70s, 80s, and even 90s,
namely through the marketing of music, clothing, and cosmetics.
Ironically, the myth of the 60s as transcendent to all of this still
prevails in the minds of many, young and old.

The concept of Internet culture appears to carry on with a like  myth of
immunity. Consequently, "content" has become a key word, as if to imply
something of cultural and social importance, when most of the time it's
nothing more than simply commodity info. Hence, telecom rate increases
is a convenient issue for companies -- big and small -- to hide behind.
The message that is preached to the flock is that rate increases
threatens the development of "content" which, in turn, is equated with

The point that is often avoided or ignored by many is that regulated
rates were originally established as a means by which to provide
"universal service". The need to make a local call in an emergency (such
as the police, an ambulance, a fire truck) makes telecommunications more
of a right than a privilege. This form of regulation, as a result, was
originally geared toward individual users.

However, business has been cashing in by using most of the resource and
reaping profits in the process. At the same time, they mouth the praises
of free market capitalism, privatization, and liberalisation. And yet,
if free markets are so wonderful, why are they up-in-arms about telecom
operators charging what they want for a service?

The issue is compounded by the fact that enabling true liberalisation
(i.e., letting telecom operators charge what they want) means individual
users suffer from increased costs, debasing the concept of universal
service. In the end, it is the individual user that is caught in the

So what is the solution? The idea of a bit-tax was raised, but quickly
came under heavy criticism. Admittedly, I was among the first to
criticise the idea as just another elaborate way to regulate the
Internet. But looking back, the idea that Soete and Cornell proposed
doesn't seem that off the mark. From the individual point of view, a
bit-tax would mean a minimal direct cost to the user, much less than the
rate increases we are seeing now. For companies, however, the cost would
mean an end to corporate welfare. In retrospect, it's interesting to
note the chagrin that the bit-tax idea raised and how the issue at hand
was conveniently diverted to an emotional level, centered around the
sacred notion of rights and freedoms. The question it raises is to what
extent was opposition motivated by concerns for profit over that of

It should be kept in mind that taxes are what pays for social services
and welfare -- things that are now being drastically cut by governments.
Still, if governments better managed our money, rather than squandering
it on the military and other useless (or counterproductive) ventures,
then perhaps there would be no need to search for new sources of revenue
in the first place. Moreover, I'm still apprehensive about a bit-tax,
for it puts us on a slippery slope: access to information would still be
a privilege to those who can afford it. Though Soete and Cornell assures
us that it would be affordable to the individual user, there is no
guarantee that it would be so in the future.

Of course, there are possible technological solutions to this dilemma.
One would involve differentiating between voice and data telephony, and
charging users accordingly. But even this is fraught with problems. Data
communications in part should also be considered a part of universal
service. Those with speech impediments and other like handicaps benefit
significantly from data communications, and it would be an infringement
on their rights to favour one form of communication over another.

So what's left? Is it merely a choice between the lesser of two evils?
Or do we leave everything up to the market, hoping that it will somehow
sort everything out to the mutual benefit of all? These seem like a lot
of questions, maybe too naive to even consider. However, we are at
crossroads: governments are being forced to liberalise their telecom
markets while at the same time pressured to continue providing corporate
welfare to businesses that deal with the Internet. It's a glaring
contradiction, and one that should be worked out as soon as possible.

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